Service Marketing
Characteristics of Services
Consumer Buying Process
Dr Omkumar Krishnan
IIM Kozhikode
The 7Ps of Services Marketing
• Traditional Marketing Mix Applied to Services
– Product
– Place and Time
– Price
– Promotion and Education
• Extended Marketing Mix for Services
– Process
– Physical Environment
– People
Characteristics of Services
• Intangibility (Subjective Benchmarking)
• Inseparability (Production & Consumption)
• Variability (Consistency)
• Perishability (Balancing Demand & Supply)
• Ownership
• (Only acquire abstract process)
Dr Omkumar Krishnan
IIM Kozhikode
Examples
Perishability Intangibility
Inseparability Variability
Dr Omkumar Krishnan
IIM Kozhikode
Customer Decision Making:
The Three-Stage Model of Service
Consumption
Pre-purchase Stage
Dr Omkumar Krishnan
IMT Ghaziabad
Need Arousal
• Decision is triggered by need arousal
• Triggers of need:
– Unconscious minds (e.g., personal identity and aspirations)
– Physical conditions (e.g., hunger )
– External sources (e.g., a service firm’s marketing activities)
Information Search
• Need arousal leads to attempts to find a solution
• Evoked set
• Alternatives then need to be evaluated before a
final decision is made
Evaluating Alternatives –
Service Attributes
– type of food, location, type of restaurant and price
– enjoy the food, the service, and the atmosphere until the actual
experience
– hygiene conditions of the kitchen and the healthiness of the
cooking ingredients
How Product Attributes Affect
Ease of Evaluation
Most Goods Most Services
Easy Difficult
To To
Evaluate Clothing Restaurant Computer evaluate
Chair Meals Repair
Motor Lawn Fertilizer Education
Vehicle Haircut Legal Services
Foods Entertainment Complex
High In High In Surgery
Search Experience High In
Attributes Attributes Credence
Attributes
Handling Perceived Risk
Perceived Risks of Purchasing and
Using Services
• Functional – unsatisfactory performance outcomes
• Financial – monetary loss, unexpected extra costs
• Temporal – wasted time, delays leading to problems
• Physical – personal injury, damage to possessions
• Psychological – fears and negative emotions
• Social – how others may think and react
• Sensory – unwanted impact on any of five senses
Reduce Risk Perception
[Link]
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Factors Influencing Customer
Expectations of Service
Purchase Decision
• Possible alternatives are compared and evaluated,
whereby the best option is selected
– Simple if perceived risks are low and alternatives are
clear
– Complex when trade-offs increase
• Trade-offs are often involved
Service Encounter Stage
● Service encounters range from high- to low-contact
● Understanding the servuction system
● Theater as a metaphor for service delivery: An integrative perspective
Service facilities
Personnel
Role and script theories
Service Encounter Stage
• Service encounter – a period of time
during which a customer interacts
directly with the service provider
• Models and frameworks:
1. “Moments of Truth” –
importance of managing
touchpoints
2. High/low contact model – extent
and nature of contact points
3. Servuction model – variations of
interactions
4. Theater metaphor – “staging”
service performances
Distinction
High-Contact Services Low-Contact Services
– Customers visit service – Little or no physical contact
facility and remain throughout – Contact usually at arm’s
service delivery length through electronic or
– Active contact physical distribution channels
– Includes most people- – Facilitated by new
processing services technologies
The Servuction System
Theatrical Metaphor:
an Integrative Perspective
• Service facilities
– Stage on which drama unfolds
– This may change from one act to another
• Personnel
– Front stage personnel are like members of a cast
– Backstage personnel are support production team
• Roles
– Like actors, employees have roles to play and behave in specific
ways
• Scripts
– Specifies the sequences of behavior for customers and employees
Post Purchase Experience
• Satisfaction: attitude-like judgment following a service
purchase or series of service interactions
• Satisfaction judgments are based on this comparison
– Positive disconfirmation (better)
– Confirmation (same)
– Negative disconfirmation (worse)
Customer Delight:
Going Beyond Satisfaction
– Unexpectedly high levels of performance
– Arousal (e.g., surprise, excitement)
– Positive affect (e.g., pleasure, joy, or happiness)
– By creating more value for customers (increased
satisfaction), the firm creates more value for the
owners
Marketing Challenges
• Marketing management tasks in the service
sector differ from those in the manufacturing
sector.
• Eight common differences between services and
goods but they do not apply equally to all
services
What are marketing implications of these
differences?
Strategic challenges in service
marketing
• Positioning
• Value for Money
• People –Key
• Convenience
• Quality
• Speed
• Meaningful Differentiation
Exercise
• Three different Sectors – Core Service
• Search Attributes
• Experience Attributes
• Credence Attributes
Dr Omkumar Krishnan
IMT Ghaziabad
Evaluating Alternatives –
Service Attributes
• Search attributes
[Link]
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Evaluating Alternatives –
Service Attributes
• Experience attributes
[Link]
SA
Evaluating Alternatives –
Service Attributes
• Credence attributes
[Link]
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